An in vitro model system has been developed for the study of the interrelationships between differentiation and carcinogenesis in hormonally-responsive mammary epithelial cells. The epithelial cells lining the ducts and alveoli of the mammary glands of Sprague-Dawley rats are separated from stromal and fat cells by enzymatic digestion followed by density gradient centrifugation. These epithelial cells are susceptible to chemical carcinogens and proliferate when added to a hormone-supplemented medium. Whereas normal mammary epithelial cells have a finite life span of approximately 2-3 weeks, after carcinogen treatment cells can be subpassaged and cultured for three months. Carcinogen-treated mammary epithelial cells acquire anchorage independent growth, but thus are have not formed tumors when injected into nude mice.